Trading stocks

A majority of the population live on tightly packed cities, tall skyscrapers, traffic jams, and lots and lots of annoying people. Living in that environment requires a complex system for sanitation, law and order and of course commerce. One highly regarded reason for living in cities would be convenience as one can literally walk across the street and get whatever item that satisfies his current need. The topic isn't about cities of course, but lets say you ran out of milk, you don't have to go all the way down to the farm just to get a gallon of it, that is so inconvenient. Revenues for the farmer is greatly reduced if it works that way as people would have to travel for miles, find his farm to be able to complete a transaction. Instead, we get our milk at a supermarket.

Since we get most of the stuff that we need from the supermarket, it acts like a middle man matching our current demand for a good from producers, otherwise it would be inefficient if we all have to actually go to the farm and get our milk. Company stocks are traded just like how we get a 12 pack soda from Walmart. Stock brokers acts as our supermarket matching buyers and sellers across the board. Imagine if you own a stock of a not so popular company, without a broker that functions as your window to a vast pool of interested buyers across the globe, it will take time for you to be able to get rid of it, and you might end up selling it at a price much lower that what it originally cost you since there is no demand for it within your local community. The worst that could happen is that stock you have in hand would turn out to be worthless. But, what if there is a person from 900 miles away who would really be interested on the stock you have and he values it a lot more then what it originally cost you?, only thing is you never had a clue he exists. That is where brokers come in handy. That person from 900 miles away would go to the brokerage and register his intent of buying say 10 shares of Archer Broadcasting Company at $10 a share. You on the other hand decided to go to the brokerage and announced your intention of selling 10 shares which happens to be Archer Broadcasting Company. The broker would then initiate the transaction taking the cash equivalent from the buyer and transferring it over to you in exchange for your shares which is handed over to the buyer.



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